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There may not be trouble ahead (after all)

By Kevin Russell | 21 September 2020

In our previous article (entitled There may be trouble ahead!), we outlined the evolving story of HMRC’s Trust Registration Service (TRS) and whether or not charities would be required to register with the Service. Penalties will apply for non-compliance so it is important for trustees to understand their obligations.

 

Since our last article, there have been a number of developments:

 

  • Following a Public Consultation, the Government has indicated that charities will now be excluded from the TRS. However, Stewardship (and others) pointed out that the relevant draft legislation did not fully achieve that aim.
  • The Government has responded by amending the draft legislation:

 

  • Charities in England and Wales that are ‘excepted from registration’ with the Charity Commission will now also fall outside of the TRS.
  • Charities in Northern Ireland which will be required to be registered with Charity Commission Northern Ireland (that is, they are on the Combined List but have not yet been registered) have not been specifically excluded. However, we are hopeful that once revised guidance is published, the position will become clearer. Our expectation is that registration will not be required.
  • Restricted and endowment etc. funds of charities: The Government response makes no mention of special trusts or other funds held by charities.

 

Existing Guidance

The existing Gov.uk Guidance, last updated on 8 July 2020, states that there is no need to register if the trust is a charitable trust and does not have to pay any tax on its income or assets. One could be forgiven for thinking therefore, that there are no issues for charities in Northern Ireland or those with special trusts or other funds. However, that is not what the proposed law says.

What does this mean for me?

Trustees of charities that are not clearly excluded from the scope of the TRS as above, should keep an eye out for developments, particularly in the run up to the introduction of the new rules.

The revised version of the draft legislation was ‘laid’ before Parliament on 24 August 2020 and is now subject to a ‘sifting procedure’. It is not yet clear when the revised regulations will come into force but the Government intention is that for those trusts subject to the TRS, registration will be required by 10 March 2022 where a trust existed before 9 February 2022.


Read more

Register as a trustee

Combined list and expression of intent form

There may be trouble ahead!

Posted by Kevin Russell

Our Legal Eagle guru and Stewardship's Technical Director, Kevin constantly has his finger on the pulse of all things tax and charity law-related. His briefing papers for charities, churches and individuals are an invaluable resource on everything from VAT to Gift Aid. 

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